Image source: Garmin.

Garmin (NASDAQ:GRMN) reported second-quarter results on July 27. The navigation technology company saw solid increases in revenue and EPS, prompting management to boost its outlook for the year ahead.

The raw numbers


Q2 2016

Q2 2015

Growth (YOY)


$811.609 million

$773.830 million


Net income

$161.064 million

$137.753 million


Earnings per share




Data source: Garmin Q2 2016 earnings press release.

What happened with Garmin this quarter?

  • Total revenue rose 5% to $812 million, as a 20% collective increase in sales for Garmin's fitness, outdoor, aviation, and marine segments (which together comprised 70% of the company's Q2 revenue) more than offset an 18% drop in auto segment sales.
  • Gross and operating margins improved to 57% and 24.7%, respectively, up from 54.2% and 21.5% in the second quarter of 2015.
  • Pro forma net income -- which excludes the effects of foreign currency movements and income tax adjustments -- jumped 20% to $166 million. And pro forma earnings per share, aided by stock buybacks, increased 21% to $0.87.

Operating segment results

Garmin's fitness segment revenue surged 34% year over year to $213 million, driven by sales of wearable devices. Outdoor revenue jumped 23% to $133 million, with the segment's sales boosted by Garmin's recent acquisition of satellite tracking device company DeLorme. Marine segment revenue rose 8% to $112 million on the strength of the company's chartplotter, fish finder, and entertainment system product lines. And aviation segment sales increased 6% to $108 million in the second quarter, despite weakness in the overall aviation market.

Garmin's largest segment, however, remains in a secular decline. Auto-related sales fell 18% to $246 million in the first quarter as consumers continue to migrate toward free, smartphone-based navigation apps.

"We achieved strong results in the second quarter of 2016 with each business segment delivering solid performance," said CEO Cliff Pemble in a press release. "Fitness and outdoor achieved impressive revenue and profit growth driven by our strengthening position in the wearables market. Aviation and marine also delivered revenue and profit growth while auto remains a solid base of profit contributions to the overall business."

Looking forward

Garmin boosted its full-year 2016 revenue outlook to approximately $2.9 billion, up from previous expectations of $2.82 billion. The company also now expects pro forma earnings per share of around $2.50, up from its prior guidance of $2.25.

"I am pleased with our performance in the first half of 2016 which gives us confidence to raise our guidance for the full year," added Pemble.

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